2019-01-17

How Fintech Startup Robinhood Makes Money (video)

How Robinhood Makes Money

Robinhoodis an investing app valued at over $5 billion, that says it's trying to "democratize America's financial system" by making investing accessible to the little guy with free trades--Invest for Free--"Invest in stocks, ETFs, options, and cryptocurrencies, all commission-free, right from your phone or desktop." It's an eye-popping valuation for a financial company with opaque metrics and plenty of competition. The young company had its share of missteps as well, prompting questions of whether or not it can handle primetime.
Robinhood has faced criticism for business practices that allow it to offer free trading. It also botched the rollout of a checking and savings account feature in late 2018, garnering concern from regulators.
But the company's incredible growth and popularity with younger investors – more than 6 million users by the end of 2018 – means it could be a major player in banking moving forward. CNBC video above published Jan 16, 2019.